TONY BLAIR last night told the Cabinet that the policy of "contain-ing" Saddam had failed and that the Iraqi dictator had to be stopped.

Briefing senior ministers on the Government's long-awaited dossier on Iraq, the Prime Minister said it was clear from intelligence reports that Saddam was continuing to build his arsenal of weapons of mass destruction (WMD).

Mr Blair said it was right to continue to try to deal with the issue of disarming Iraq's WMD capability through the United Nations.

However he said Saddam had only agreed to readmit UN weapons inspectors under intense international pressure and it was essential that the pressure was maintained.

He said the 50-page dossier, drawing on the latest intelligence, showed that the "real and serious problem" of Iraq's WMD programme had grown worse in the four years since the inspections ended.

"There is no doubt whatever that, despite the denials, despite sanctions, despite the UN Security Council resolutions, he is continuing with his WMD programme," he said.

"We are not talking about historic leftovers but an ongoing, continuing programme."

The dossier is due to be made public at 8am today as MPs return to Westminster for a day-long emergency debate on the growing crisis.

After yesterday's meeting, Foreign Secretary Jack Straw said the Government still hoped to see the issue resolved peacefully, but was prepared for military action if it could not. He said the question of individual ministers' reservations had not arisen.

However Mr Blair is likely to face a rough ride from some of his own Labour MPs when he delivers his Commons statement today ahead of the debate.

In an apparent attempt to defuse opposition, Downing Street was making clear that the Government had not given up hope of a diplomatic resolution to the crisis.

The draft of a new UN Security Council resolution setting out the terms for an "intrusive" regime of weapons inspections will be tabled "within days", his spokesman said.